Detailed Narrative
AI and Cloud Demand Driving Growth
2025 was a pivotal year for the data center industry, with AI adoption accelerating and cloud platforms scaling, making power a primary constraint. Digital Realty's strategy focuses on delivering AI-ready infrastructure in Tier 1 metros, leveraging its global footprint and 5-gigawatt power bank to position incremental capacity in power-constrained markets. The company anticipates continued expansion of private AI exchange use cases as a durable driver of interconnection demand, especially as inference workloads become embedded into business processes.
Strategic Global Expansion and Connectivity
PlatformDIGITAL has expanded into 31 countries and 56 markets by year-end, enhancing its global reach. ServiceFabric adoption accelerated meaningfully, now enabling access to over 300 cloud on-ramps and more than 700 interconnected data centers globally. Recent APAC expansion includes a joint venture in Jakarta, Indonesia, and the acquisition of one of Malaysia's most highly connected data centers, further strengthening the company's presence in fast-growing regions.
Record Leasing Momentum Across Product Spectrum
Digital Realty achieved over $1 billion in new leases for the second consecutive year, with $1.2 billion in bookings in 2025, representing a pace 70% above the average bookings over the preceding five-year period. Hyperscale leasing exceeded $800 million in 2025, demonstrating strong underlying demand. The 0-1 megawatt plus interconnection product set also saw record performance, posting nearly $340 million in bookings, a 35% increase over 2024 levels.
Evolution of Funding Strategy and Private Capital Initiatives
The company successfully closed $3.225 billion of LP equity commitments for its inaugural closed-end fund, marking its official entry into the private markets. This strategy aims to support the growth of hyperscale data center capacity and has enabled a doubling of fee income in 2025. An additional 40% stake in five stabilized seed assets was contributed to the fund in late December, resulting in $427 million of net proceeds to Digital Realty.
Robust Development Pipeline and Capacity Delivery
Digital Realty's gross data center development pipeline underway stands at just over $10 billion, with an 11.9% expected stabilized yield. The company delivered approximately 289 megawatts of new capacity in 2025 and started about 135 megawatts of new data center projects in Q4, increasing its total development to 769 megawatts under construction. This consistent delivery supports customer demand despite tightening labor and supply chains.
Transition to Power-Based Reporting Metrics
Beginning next quarter, Digital Realty plans to enhance its disclosures by transitioning the focus toward power-based metrics. Key elements like leasing and development activity are already power-based, and occupancy will now be highlighted on an IT load basis. This update aims to better reflect the dynamics of the current business and provide a clearer, more consistent view of utilization across the platform, while maintaining industry-leading transparency.